Report Shows Increased U.S. Military Spending Slows Economy

[RestoreGore]

http://www.cepr.net/index.php?option=com_content&task=view&id=1157&Itemid=77

Military Spending Slows Economy
Report Shows Increased U.S. Military Spending Slows Economy
For Immediate Release: May 1, 2007

Washington, DC: The Center for Economic and Policy Research released a report today estimating the economic impact of increased U.S. military spending comparable to the spending on the Iraq war. The report, presenting the results of a simulation from the economic forecasting company Global Insight, shows the increased level of military spending leads to fewer jobs and slower economic growth.

For the report, The Economic Impact of the Iraq War and Higher Military Spending, by economist Dean Baker, CEPR commissioned Global Insight to run a simulation with its macroeconomic model. Global Insight's model was selected for this analysis because it is a commonly used and widely respected model. It estimated the impact of an increase in annual U.S. military spending equal to 1 percent of GDP (approximately equal to the military spending increase compared with pre-September 11th baseline).

The projections show the following:

-- After an initial demand stimulus, the effect of increased military spending turns negative around the sixth year. After 10 years of higher defense spending, there would be 464,000 fewer jobs than in the baseline scenario with lower defense spending.

-- Inflation and interest rates are considerably higher. After 5 years, the interest rate on 10-Year Treasury notes is projected to be 0.7 percentage points higher than in the baseline scenario. After 10 years, the gap would rise to 0.9 percentage points.

-- Higher interest rates lead to reduced demand in the interest-sensitive sectors of the economy. After 5 years, annual car and truck sales are projected to go down by 192,200 in the high military spending scenario. After 10 years, the drop is projected to be 323,300 and after 20 years annual sales are projected to be down 731,400.

-- Construction and manufacturing are the sectors that are projected to experience the largest shares of the job loss.

"It is often believed that wars and military spending increases are good for the economy," said Baker. "In fact, most economic models show that military spending diverts resources from productive uses, such as consumption and investment, and ultimately slows economic growth and reduces employment." The report recommends that Congress request the Congressional Budget Office produce its own projections of the economic impact of a sustained increase in defense spending.

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But let's just keep voting for increases in military spending at an even more obscene level than they are already at and even more funds for this "war," that never go where they are supposed to because hell, when you have ideological sociopaths and CROOKS running it all (into the ground,) it is only THEIR economy they give a damn about. War is only a boon to the war racketeers and the scum that uses our troops' blood for profit, and it is time to cut it off at the spigot. IT IS TIME TO STOP FUNDING THIS "WAR." And the last sentence in this report makes me laugh, because I have a feeling they would be totally opposite of this report to validate their warmongering for $$$$.
WAR IS A RACKET.
~~~~~
http://www.twf.org/News/Y2001/0911-Racket.html

'War Is a Racket'

Excerpt from a speech delivered in 1933 by General Smedley Darlington Butler, USMC. General Butler was the recipient of two Congressional Medals of Honor - one of only two Marines so honored.

War is just a racket. A racket is best described, I believe, as something that is not what it seems to the majority of people. Only a small inside group knows what it is about. It is conducted for the benefit of the very few at the expense of the masses. . . . There isn't a trick in the racketeering bag that the military gang is blind to. It has its "finger men" to point out enemies, its "muscle men" to destroy enemies, its "brain men" to plan war preparations, and a "Big Boss" Super-Nationalistic-Capitalism.

It may seem odd for me, a military man to adopt such a comparison. Truthfulness compels me to. I spent thirty- three years and four months in active military service as a member of this country's most agile military force, the Marine Corps. I served in all commissioned ranks from Second Lieutenant to Major-General. And during that period, I spent most of my time being a high class muscle- man for Big Business, for Wall Street and for the Bankers. In short, I was a racketeer, a gangster for capitalism.

I suspected I was just part of a racket at the time. Now I am sure of it. Like all the members of the military profession, I never had a thought of my own until I left the service. My mental faculties remained in suspended animation while I obeyed the orders of higher-ups. This is typical with everyone in the military service.

I helped make Mexico, especially Tampico, safe for American oil interests in 1914. I helped make Haiti and Cuba a decent place for the National City Bank boys to collect revenues in. I helped in the raping of half a dozen Central American republics for the benefits of Wall Street. The record of racketeering is long. I helped purify Nicaragua for the international banking house of Brown Brothers in 1909-1912 (where have I heard that name before?). I brought light to the Dominican Republic for American sugar interests in 1916. In China I helped to see to it that Standard Oil went its way unmolested.

During those years, I had, as the boys in the back room would say, a swell racket. Looking back on it, I feel that I could have given Al Capone a few hints. The best he could do was to operate his racket in three districts. I operated on three continents. . . .

---
And NOTHING has changed about how it is conducted, who it truly prospers, and who suffers the most because of it. And that needs to change.

[cherokeeprogressive]

1. Stop funding the "war", and reconfigure our military to exist in today's reality.

I believe our military philosophy is antiqued and out of touch with the reality of today's world. A mechanized/uniformed military does absolutely no good if your enemy/opponent moves freely and undetected through the local citizenry. I believe the days of "standoff war", where armies lob artillery shells and missiles at each other from great distances are long gone. Gone since Korea in fact. And I think most would agree that recent experience shows that wars/skirmishes/police actions or WHATEVER the hell you want to call them CANNOT be won by the military's airborne component. The nature of war has changed in such a way as to render our military philosophy obsolete.

Today's military reality is one where civilian automobiles/trucks are turned into suicide bombs meant to kill or maim the largest number of people possible. Sometimes (more often than not actually) the killing isn't meant to defeat a military component, but to squash the WILL of the citizens who support the military from home with tax dollars.

We are up to our ears in shit. IT WILL NOT GET BETTER. Bring the troops home. Bring them home NOW. Let the million or so active duty personnel stationed or serving outside of our borders spend their tax dollar generated paychecks HERE, where the tax dollars originated. Wouldn't that be a huge shot in the arm for the economy?

Consider the money saved. How much does it cost to keep a supply line open to the other side of the world? How much do we pay to lease land for military bases outside of our borders?

I can totally see that military spending takes money out of our economy.

Bring them all home tomorrow. Please.

[RestoreGore]

2. To me it is also Fascist

The propping up of military action to whip a nation into a nationalistic furor based on fear with an agenda tied to corporations is Fascist. It is not indicative of a Democratic society that truly believes in peace. I surely do not wear rose colored glasses and do believe there are times when you must defend your shores. However, what the powerbrokers and war racketeers that have been infesting our government for years have been doing is nowhere near that. It is simply noting more than murder for profit.

[cherokeeprogressive]

3. I wouldn't disagree with you on that. n/t

[applegrove]

4. Slows the economy so international firms can purr along in the stock market

and there never has to be a slowdown to fight inflation. Americans are fighting inflation alongside those Americans fight in the war. Do they know this? That it is all about the stock market? Used to be when the economy heated up too much interest rates would rise and the stock market would slow down. The fight hyperinflation. Every few years it went like that. Now with a war..and billions being spend abroad on something that doesn't create jobs (pressure for raises)...those few in the stockmarket benefit hugely.

[RestoreGore]

5. exactly, which explains the stock market boon which is a false indicator

I am still amazed at how many people think the closing numbers of the market actually reflect the true economic picture of this country. You have hungry homeless people sitting on the ground not too far from where these brokers of death do their business, and yet so many still think everything is just hunky dorry. I believe for April only 58000 jobs were added which is the worst in over two years. People are losing their jobs, cannot save, are paying too much for food and rent, and are literally being privitized to death with a healthcare system that abandons them. I truly wonder what has to happen before the majority just gets so fed up with having to live this way that we march on Washington DC to DEMAND justice and the removal of these crooks... But we won't... we will sit and listen to the representatives of that system run for the chair of the military industrial complex as we get all caught up in the corporate media's spell, and we like good little citizens of Oceania will then once again go out to the polls actually thinking we are influencing who the winner is... and this war will go on and the racketeers will continue to rake it in as long as we continue to accept the illusion.

[applegrove]

8. With * at 30%, I think people have woken up. I cannot wait until the next election.

[RestoreGore]

9. To me, actions speak louder than polls n/t

[applegrove]

10. Yes and all the investigations are action!

[RestoreGore]

11. Only if they lead to the moral imperative. n/t

[RL3AO]

6. I love all these reports. They all contridict each other.

[RestoreGore]

7. Well, those of us living it know the reality n/t